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Much debate and plenty of concern have surrounded the new GOP health plan released in June, putting an end to the waiting, but not necessarily all the worry. As the weeks ticked by with most Americans and more than a few senators left in the dark, majority leader Mitch McConnell and a handful of Senate Republicans met in secrecy, drafting their version of the GOP Health Plan.

Changes to the original House bill that passed last month were few but significant, and more appear on the horizon, facing opposition by both Democratic senators and some Republicans, not to mention a growing number of people in the US. To clarify some of the key issues at stake, here is a breakdown of a few pertinent changes in the Senate health bill as it currently stands and what they could mean for healthcare in the future.

Medicaid/Expansion Cuts

There are two key cuts to Medicaid under the Senate BCRA bill (Better Care & Reconciliation Act). But, make no mistake, it is less a health plan than it is a healthcare repeal, though most assumed that meant repealing the ACA. The news that Medicaid was on the chopping block was somewhat of a surprise. In fact, a recent poll found nearly 40% of voters didn’t know about the $834 billion dollar cuts to Medicaid expansion included in the AHCA (American Health Care Act) that House Republicans passed last month. The Senate version takes these cuts even further. The House bill called for ending Medicaid expansion completely by 2020, leaving 11 Million people without health insurance. The Senate bill plans to phase-out Medicaid expansion over four years starting in 2020 before cutting it all together, but also adds deeper cuts to Medicaid itself.

Annual & Lifetime Caps: OK, bear with me. This gets a little technical, but it’s important! Currently, state or per-capita Medicaid funding is variable, based on need and use, and set to medical care inflation rates (CPI-M). The Senate bill would change this to a fixed rate, setting annual caps based on standard inflation rates (CPI-U). If coverage or treatment exceeds the fixed annual cap, the state must figure out how to pay the extra costs themselves, or pass those costs onto consumers. Between 2000- 2017, medical care rates increased by nearly 2: 1 compared to standard inflation rates. CBO estimated this would cause a 9% decrease in funding over time, or approximately $10 Billion dollars less each year under the original House bill. Early estimates under the Senate bill are closer to 25%, which would mean roughly a $20-25 Billion dollar cut in Medicaid funding annually. According to Business Insider, this switch could seriously impact low-income seniors, and others currently covered by Medicaid.

“Because Medicaid is already one of the lowest-cost providers of healthcare, a state could either cut benefits, which would affect the quality of coverage, or reduce who is eligible for the program, which could hurt people with disabilities, older people, or people suffering from substance abuse.” –Harrison Jacobs, BI

Drastic cuts to Medicare would not only leave millions of Americans without health coverage, it would also defund key programs for low-income and working families, programs like Aid to Families with Dependent Children (AFDC), and Temporary Assistance for Needy Families (TANF), while reducing resources for those who qualify for food stamps and WIC (Women, Infants, and Children food and nutrition program). Many low-income families with young children rely on programs like these to survive. This would also limit funding and resources for long-term senior care and the disabled, including long-term care through the VA.

While these cuts could decrease the deficit by up to $321 Billion over the next 10 years, it also leaves 22 Million people without health insurance and would cost millions more to resurrect the low-cost community programs, free clinics and treatment services replaced by Medicaid expansion.

In addition, the Senate bill adds work requirements for access to services. Each state could set mandatory employment hours to qualify for Medicaid coverage. This particularly impacts the elderly and others who work part-time, seasonal, or inconsistent hours. (Students, pregnant women, and people with disabilities would be exempt, but not seniors over age 65).

ACA Cuts/Changes

Age-Based Limits: Under ACA, insurers can only charge seniors up to 3X what younger insured premiums for health coverage cost. The Senate bill raises this to 5X as much. This would create an 800% increase in premiums for older, low-income Americans after age 65, based on CBO’s assessment of the house bill. The Senate bill keeps this provision so similar hikes in premiums for those over 65 are expected. Seniors make up one of the largest growing demographics globally so the health impact on growing numbers of older Americans would be more than ever before, and the lower their income, the more they will pay:

AVG Annual Premium Rate: $3200

60 & Over AVG Premium Rate: $17,900

64 & Up @ $25,000 Annual Income: +$7,000 Premium Hike

64 & Up @ $15,000 Annual Income: +$8,400 Premium Hike.

The Senate bill also puts caps on certain illnesses and a lifetime cap in general. For example, if a $120,000 annual cap is set for cancer treatment, and someone caps out in May, the rest of the years’ costs would not be covered. If an illness is prolonged, a person could reach their lifetime cap before treatment is completed as well, leaving patients to cover the cost of finishing treatment or go without.

There would also be an 18% reduction in discretionary funds, which could reduce funding or even eliminate entire programs not currently covered by Medicaid. Close to $600,000 annually could be cut from senior services like the Meals on Wheels program, Senior Center Meals, rides, counseling and legal services.

$290,000 from Meals on Wheels

$250,000 from Senior Center Meals

$40,000 from Senior/Disabled Rides & Counseling/Legal Services

Penalties: One of the biggest complaints about Obamacare has been the mandates requiring people and employers to carry insurance plans or receive a financial penalty. The idea was “to avoid the insurance death spiral” where healthy people wait until they’re sick to seek treatment. This forces insurers to raise their premiums to cover more severe conditions or emergency services which are more expensive.

Under the Senate bill, these penalties, or mandates, are replaced, which may ensure the “death spiral” that ACA opponents claim mandatory insurance requirements have caused. The real issue, however, is not the mandates themselves, but unregulated insurance rates. Programs like Medicaid and Medicare are the only programs currently with government regulated pricing. On the free market, rates are anything but consistent and price-gouging is common as we’ve seen with the astronomical rise in drug prices in recent years. The House bill removed the mandatory insurance penalties completely. The Senate bill would replace them with a 6-month lockout on coverage if insurance lapses. someone without uninsurance or whose coverage lapsed during the prior year could see premiums go up as much as 30%.

The quality of Care: The ACA, whose full name is the Patient Protection and Affordable Care Act, includes protections for what insurance plans must cover, linking Quality of Care to Medicare and Medicaid subsidies and reimbursements. The better the care that doctors, nurses, hospitals, and emergency rooms provide, the more money they receive through incentives. Those costs are absorbed by insurers, pharmaceutical, and medical device companies who can’t pass costs on to consumers under government-regulated pricing allowed through Medicare which sets limits on what they can charge.

This is arguably one of the main reasons that health insurance and pharmaceutical companies fight so hard to keep universal healthcare from passing, and certainly why the ACA isn’t working for everyone. HMO’s and insurance companies still set their own rates under ACA rules, outside of Medicare-caid programs, as does the Trumpcare Bill, so the issue of affordability still isn’t being addressed. Either would keep insurance rates higher for free-market health plans, though, the Trump care bill would push rates even higher. This may be why so many are joining the call for single-payer, or “Medicare-for-All” programs. Rather than government-funded or regulated insurance, we could have government-regulated pricing for insurers, which is currently not allowed. Being able to negotiate pricing for services and drug costs directly with the insurance and pharmaceutical industries could keep costs and care affordable and available for everyone.

Essential Protections & Waivers: There’s a little bait-and-switch in the current Senate bill over the pre-existing conditions clause. After a backlash from voters for removing pre-existing conditions in the House bill, the Senate version attempts to go around the issue by leaving the protections in without providing the coverage for chronic illness and/or expensive treatments usually associated with pre-existing conditions. While the Senate bill leaves the pre-existing conditions clause in place, it lifts the mandates for the 10 Essential Health Benefits required under the ACA. The National Academy of Medicine defines these “essential health benefits” as:

Under the Senate health bill, states can request a waiver allowing insurers to waive coverage for essential services under the guise of providing a lower-rate insurance option. While prices might decrease slightly for some insurance plans, the plans would cover fewer essential services. Childbirth, for example, could cost tens of thousands of dollars if waived from insurance plans, while emergency and ambulatory services, already exorbitant in price may not be covered at all.

Even in states that don’t take advantage of these waivers, people could still lose basic services if insured through their employer. Companies that reside in more than one state are not required to offer insurance plans based on where you live and may opt to buy insurance for all their employees through a “waiver state”. So, even here in Washington where it’s unlikely these waivers would be used by everyone, what the bigger, cross-state employers decide to do is up to them.

There are no guarantees these plans will be any cheaper, either. By removing mandatory penalties and cutting $600-$1400 Billion dollars from Medicaid and Medicaid expansion, fewer people would be covered, sending the millions of uninsured to emergency rooms when conditions become acute, requiring more treatment for unmanaged health, which would hike premiums and costs for people who are insured, especially for higher-risk groups like the poor and elderly. Without enough people on the free exchange, health premiums could go through the roof again, just as they did before ACA.

Many of us remember the days and nights spent arguing with providers over denied claims for services that cost an arm and a leg to cover or struggling to find a doctor or nearby services included in our network. Unregulated insurance was a problem then and now, though much worse for anyone who moved or changed jobs after developing a “pre-existing” health condition. The result is we pay a lot more for less coverage with insurance-mandated pricing, and the poorer, sicker, and older you are, the more you’re likely to pay.

Women’s Health: While the Senate bill leaves in the stipulation that insurers cannot charge women more for insurance, states could receive a waiver for providing maternity care, contraceptives, or other basic women’s health services. No funding at all is allowed for women’s clinics providing abortion services. Planned Parenthood would lose 80% of their funding next year for all their services, which many low-income women at or below 150% of the federal poverty level rely on. Only 03% of Planned Parenthood’s budget goes to abortion services so the remaining 77% of cuts would remove vital services like prenatal care, breast cancer screenings, sex education services, contraceptives, and testing/treatment for STD’s. According to the Guttmacher Institute, 20 Million low-income women rely on Planned Parenthood for these and other women’s health services.

Subsidies & Costs: Under ACA, 70% 0f health insurance costs must go to cover health care services. Under the Senate bill, only 58% of co-pays and prescription costs must be covered. It would also lower tax credits for incomes 400% above the poverty line, roughly $48,000 annual salaries down to 350%, or $42,000 annually. This would mean middle-income brackets would receive fewer tax credits or reductions towards hikes in premiums. It is also tiered by age so, after turning 33 years old, the cap decreases to 175% above the poverty level, or $21,000 annual income, which means premium costs of 5.3% of someone’s annual income. After age 59, premiums would increase to 8.3% or roughly $1750 a year.

Service-Based Costs: ACA also requires 80% of the money spent on insurance to go towards health services or be reimbursed to the consumer. Insurers can only spend 20% for administrative costs, marketing or CEO salaries. Approximately $396 Million dollars in reimbursements went to 4.8 Million families in 2015 alone, the average rebate received approximately $138 per person, paid back from shareholder profits. AHCA removes this stipulation, leaving it up to the individual states to determine.

Tax Break: This is the other area of contention among middle-income workers and small business owners hoping to see a reduction in what anticipated premium increases could be under the ACA’s “Cadillac Tax”. However, this excise tax is not a direct hike in premiums for all health insurance coverage. Rather, it’s a 40% hike in costs for insurers who provide premium health plans for what’s considered “excess” health care, according to the ACA facts website. In their words, “It’s 40% of every dollar spent over $10,200 for individuals and $27,500 for a family in 2018. It is not just a flat 40% increase on the total dollar amount.” (Obamacarefacts.com- Cadillac Tax).

While much of this cost would pass on to consumers, it only applies to non-essential services, or premium plans for companies and individuals who can afford higher rates for extra health perks, not plans for middle incomes already struggling with premium costs. While this excise tax was intended to cover high end “luxury costs”, without hiking up regular insurance rates for executive non-essential services, it also doesn’t lower rates for middle incomes and smaller businesses. It was only intended for big companies and wealthier individuals willing to pay more for extras they can afford- like buying a $50,000 Cadillac, instead of a $12,000 Nissan. The Nissan may fluctuate a little in cost as Cadillac prices increase, but there is still between a $35,000 to $75,000 difference in price. The same principle applies here. Yet, rather than get rid of the Cadillac Tax altogether, as Obamacare critics had hoped, the Senate Bill simply delays the date it will go into effect until 2026. Premium hikes will likely continue in the meantime, though not due to the Cadillac Tax which was not repealed after all.

The primary tax cuts Republican senators did include in the bill were only for a select few. They’ve included huge tax breaks for the very wealthy, approximately 45% of which only benefit the top 1%. Under the GOP health plan, the 3.8% investment tax on incomes over $200,000 per year is removed instead of the Cadillac tax. The result is a $44.5 Million dollar annual tax break for individuals with incomes over $875,000 while those with incomes over $5 million save closer to $250,000 each year. Business owners like casino- owner Sheldon Adelson, for example, or the Walmart family who owns “more wealth than the bottom 40% of America”, according to the true-false pedometer-rating from Politifact on this now infamous Bernie Sanders quote.

While some marginal breaks are given to lower income brackets, this bill resembles a Republican tax bill more than a health care reform bill with yet another tremendous tax break for the wealthy few at the expense of the many lower income, working-class Americans, children, and seniors struggling with healthcare costs. An estimated $700 billion dollar loss over the next decade would result from removing the excise tax, as opposed to the $772 billion saved by removing Medicaid expansion before 2026, according to the CBO’s recent analysis. In other words, nearly all 22 million people displaced under the Senate plan could keep their coverage if not for these excessive tax breaks only benefitting the ultra-rich.

Though, the losses from these cuts would continue well beyond the initial CBO figure, not to mention continue to spike health care premiums and gut Medicaid funds in the future. The billions of dollars added to the federal deficit for tax breaks only benefitting a wealthy few end up costing taxpayers considerably more than a one-time saving earned by cutting expansion.

The Senate BCRA bill includes other changes beyond the ones discussed here. If you’d like to read through a copy yourself for a more in-depth view, you can follow this link.